The New Taiwan Dollar surged dramatically last Friday (2nd), with the USD/TWD hitting 30.77 at one point before closing at 31.064, marking a 3.07% increase in a single day, the largest rise since the central bank began its statistics. Bloomberg reports that the New Taiwan Dollar has grabbed attention in the currency market amid an improvement in sentiment towards Taiwanese assets following China’s assessment of possible trade negotiations with the U.S.

While many experts predict that the Taiwan Dollar will return to the psychological level of 20, analysts are signaling that significant resistance may be encountered around the 31 TWD level. Data shows that Taiwan's economic growth is outpacing expectations, and U.S. tech giants are anticipated to import more semiconductors from Taiwan, contributing to the optimistic mood.

Traders have indicated that exporters are contributing to the upward trend by aggressively selling USD amid the sudden appreciation. Despite state-owned banks buying USD, the continual selling by exporters has caused the TWD to keep rising. Additionally, ETF managers are selling USD as domestic clients seek to cash out their offshore investments.

Christopher Wong, a strategist at OCBC Bank, pointed out that the pace of the TWD's appreciation has taken many market participants by surprise, prompting a rush to convert USD to TWD. Looking ahead, analysts express caution regarding whether this upward trend can be sustained. Khoon Goh, head of Asia research at ANZ Bank, noted that strong resistance is expected around the 31 TWD level. Kiyong Seong, a macro strategist at Crédit Agricole in Hong Kong, believes that the TWD's appreciation will slow from current levels, as the USD remains a major reserve currency.